With another wave of COVID-19 wreaking havoc worldwide, recent insurance coverage litigation decisions have been building upon lessons learned since the pandemic began.

Between March and October, more than 1,200 COVID-related lawsuits were filed by policyholders across the country. Many of the plaintiffs were restaurants, bars, hair salons and entertainment venues that had suffered staggering losses during extended government shutdowns.

These cases disputed business interruption claim denials that stipulated that no “direct physical damage” had occurred, or that exclusions for contamination or pollution applied. These early decisions went mostly against the plaintiffs for a number of reasons, including:

In claims triggered by order of civil authority, there was no “direct physical loss of or damage to property.” In business interruption claims, there was no “direct physical loss of or damage to the property,” sometimes expanded to no “structural damage.” There was no “structural alteration.”
Policies contained a virus exclusion.

In recent weeks, however, many decisions indicate that the tide is starting to turn in favor of policyholders.